CORPORATE MERGERS AND ACQUISITIONS IN INDIA’S AUTOMOTIVE AND ANCILLARY INDUSTRY: SHAREHOLDER WEALTH AND PERFORMANCE PERSPECTIVES

Abstract

Mergers are an essential part of a company's life cycle. This paper investigates whether merger announcements have a positive share price reaction. Using the market model event study the study finds a positive shareholder’s wealth creation upon merger announcement. The paper further looks into the improvement of the financial performance of a company post-merger. The research finds that there is only an improvement in the return of assets three years post-merger announcement in a statistically significant manner. The study focuses on automotive and ancillary industries and studies merger announcements from 2010-11 to 2019-20 in the Indian economy.